(17) The Y variable in the formula for the quantity theory of money stands for t
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Question
(17) The Y variable in the formula for the quantity theory of money stands for the total output of the economy. the price level. the money supply. the equilibrium intersection of supply and demand.
(18) A price index in one year was 120. The next year the same index was 140. What was the approximate percentage change in the price level as measured by that price index? 12% 17% 20% 40%
(19) Which of the following statements about contractions is true? Significant or prolonged contractions are called booms. A contraction usually follows a trough in the business cycle. Contractions are periods when the real GDP grows slower than the trend. The government usually does not have a part in moderating the business cycle when a contraction is occurring.
(20) If an employer pays an efficiency wage, worker turnover will increase. worker health may be adversely affected. worker quality may be adversely affected. unemployment may increase.
(21) The lowest rate of unemployment that does not create inflationary pressure is called the NERU: Non-Expansionary Rate of Unemployment MUR: Minimal Unemployment Rate NAIRU: Non-Accelerating Inflation Rate of Unemployment NRU: Natural Rate of Unemployment
(22) The Marxian view of the business cycle is that economic fluctuations occur because capitalism must increase the rate of exploitation of workers in order to increase profits. consumers are not spending enough to stimulate growth in the economy. the government does not have enough planning to be able to stop the cycles. “creative destruction” forces major changes in the composition of the economy.
(23) Which of the following correctly expresses the quantity theory of money? money × the price level = velocity × real output money × velocity = price level × real output velocity × real output = price level × money price level × velocity = real output
(24) In Figure A, which line in the graph represents a minimum wage above the market wage rate?
Line 1 Line 2 Line 3 Line 4
(25) In this diagram of the business cycle, the trough is at point
A B C D
Explanation / Answer
17. The total output in the economy.
18.17 %
19.A contraction usually fallows a trough in the business cycle.
20.Unempolyment may increase.
21.NAIRU
22.Creative destruction forces major changes in the composition of the economy.
23.MONEY * VELOCITY = PRICE LEVEL * REAL OUTPUT.
24.LINE 1
25. c
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